VW Suspends Talks With Proton

Volkswagen AG says it is “shelving” talks with the Malaysian government regarding a cooperative venture with national car company Proton Holdings Bhd.

The German auto maker does not give a reason for ending the talks but does leave open the possibility of resuming negotiations at a future time.

The two auto makers have been in discussions over a strategic partnership for several years, with a German newspaper reporting last month that VW initially planned to buy a 20% stake in Proton and gradually raise its share to 50%.

However, a recent report by Malaysia’s Affin Investment Bank Bhd says Proton does not need an alliance with VW to survive.

Proton has seen the worst of its financial and share-price performance, the report says, and while a tie-up with VW would be helpful, the national car company should be able to turn around soon on its own.

Meanwhile, VW says it is stepping up efforts to review other business possibilities in the Association of Southeast Asian Nations region.

“The company remains committed to its plans to establish a sustainable and successful production and sales base,” VW says.